Losses from cryptocurrency thefts have surged in the first half of the year as hackers once again focused on exploiting centralized exchanges “with greater frequency,” according to a report from blockchain analysis firm Chainalysis.
“After a 50 percent drawdown in crypto value stolen in 2023 compared to 2022, this year has seen a resurgence of hacking activity,” said the report.
“However, the past six months did see significantly higher average token prices compared to this period last year; this is likely to have contributed to the increased theft volumes,” TRM said.
Chainalysis made similar conclusions. It found that despite an over 80 percent jump in thefts, the number of crypto hacking incidents only increased by 2.76 percent.
“Much of the change in the value compromised is attributable to rising asset prices,” it said. “For example, the price of bitcoin has increased from an average price of $26,141 in the first seven months of 2023 to an average price of $60,091 this year through July, an increase of 130 percent.”
The average value of stolen funds per incident was found to have increased by nearly 80 percent to $10.6 million.
Last year, 30 percent of the transaction volume of stolen funds was accounted for by Bitcoin. So far this year, Bitcoin made up 40 percent of the transaction volume.
“Crypto thieves seem to be returning to their roots and targeting centralized exchanges again after four years focused on their decentralized counterparts, which typically do not trade bitcoin,” said the report.
Biggest Ransomware Year
According to the Chainalysis report, ransomware crypto payments totaled nearly $460 million in the January–June period, up two percent from the same period in 2023. This year is “on track to be the highest-grossing ransomware year yet,” it said. The existing record in ransomware payments was set last year with more than a billion dollars paid in ransoms.High-profile payments are happening despite significant law enforcement actions, Chainalysis noted.
Andrew Davis, general counsel at Kiva Consulting, pointed out that ransomware activity has remained steady even after disrupting major hacking groups like LockBit and ALPHV/BlackCat.
“Whether it be former affiliates of these well-known threat actor operations, or new upstarts, a large number of new ransomware groups have joined the fray, displaying new methods and techniques to carry out their attacks,” he said in the report.
Ransomware remains a key disruptor in the United States.
An attack targeted the Colonial Pipeline, halting fuel operations and ending up creating gas shortages in multiple states.
Based on recent reports from industries, the agency estimated that ransomware attacks cost businesses an average of $1.85 million to recover from. In addition, 80 percent of victims who paid ransoms were revictimized by the hackers, the agency noted.
“The economic, technical, and reputational impacts of ransomware incidents, throughout the initial disruption and, at times, extended recovery, continue to pose a challenge for organizations large and small,” it said.